Cooperatives and MSMEs Development Cabinet Secretary Wycliffe Oparanya wants women to prioritise savings, financial literacy and smart investments in order to gain financial independence.
According to the CS, fewer women join savings and credit cooperative societies (Saccos) in Kenya compared to men which is detrimental to the overall national economic development of the country.
“Saccos offer a great opportunity for women to gain financial independence. Let our women join Saccos and you will see a great positive economic change in this country,” he said in an interview during celebrations to mark the International Women’s Day.
A previous report by the World Bank targeting financial inclusion in Kenya, says women primarily shun Saccos due to lower income levels, limited access to assets for collateral, and preference for informal “chamas”.
Socio-cultural norms, lack of information, and male-dominated management in key sectors also limit participation.
Martin Gichangi, an economist in Nairobi says women mostly shun Saccos due to low disposable incomes.
“Women often work in sectors with lower or less stable income, making it difficult to commit to mandatory monthly Sacco savings. At the same time, lack of assets is also a defining factor,” he explains.
In addition, many women lack ownership rights to land or property, which are often required as collateral for the larger loans provided by Saccos.
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According to the World Bank, preference for informal groups (Chamas) has been quite pervasive in Kenya. Women often prefer informal, flexible, and fast-acting “chamas” over the more formal, rigid structures of Saccos.
At the same time, male-dominated sectors in Kenya tend to be more attractive to Saccos. These entities are often tied to specific, male-dominated employment sectors like formal employment, transportation, or large-scale farming.
Consequently, information and education gaps drive more women, especially in rural Kenya to shun Saccos. A lack of awareness regarding the benefits and operations of Saccos also keeps many women from joining.
Socio-cultural barriers were also cited as a source of concern on why many women are not taking the Sacco financial path.
Societal norms can restrict women’s ability to travel to meet with Sacco officials or participate in decision-making.
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Significantly, women are known to be more risk-averse than men. Women may be more hesitant to risk their savings in a Sacco compared to men, choosing safer, more immediate informal options and that’s how Chamas play in.
At the same time, it has been commendable that more women Saccos have come up in Kenya over the years. Some of the notable ones are Bariki women Sacco at the Coast and United Women Sacco.
Saccos are vital in Kenya for promoting financial inclusion, offering affordable credit, and fostering a savings culture, contributing over 30 per cent to the national gross domestic product (GDP)
They provide member-owned, democratic financial services with lower fees, higher returns on savings, and loans for development for example housing and education.
Saccos provide accessible banking services to individuals who might not qualify for traditional bank loans, particularly in rural areas.
They at the same time offer affordable Credit and Savings. They offer lower-interest loans, often three to five times a member’s savings, making them ideal for development projects like agriculture, land purchase, and business expansion.
Consequently they offer economic empowerment by encouraging consistent savings and providing affordable credit, Saccos help reduce poverty and promote economic growth.
In Kenya, Saccos are member-centric entities. As member-owned organisations, they operate on a, democratic, and, often, non-profit-maximisation basis, ensuring profits are distributed as dividends.
They offer support for smallholder farmers uniquely addressing the unique needs of agricultural workers by providing tailored financial solutions.
By Mwiti Mukunga
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